Indian Oil Corp (IOC), the nation’s biggest oil firm, on January 30 reported a tripling of its net profit in December quarter as inventory gains offset lower refinery margins and forex losses.
Standalone net profit in October-December at ₹2,339.02 crore, or ₹2.55 per share, was higher than ₹716.82 crores, or ₹0.76 per share, net profit in the same period in the previous year, IOC Chairman Sanjiv Singh said in New Delhi.
“The variation is majorly on account of inventory gain during the current quarter against inventory loss during the corresponding quarter of the previous financial year, partly offset by lower refining margins and exchange losses during the current quarter,” he said.
The company had an inventory gain of ₹1,608 crores in the three month period as compared to an inventory loss of ₹8,523 crores in the third quarter of 2018-19 fiscal, he said, adding that the company’s net refinery margin stood at $2.15 per barrel in Q3 as compared to $5.12 a year ago.
Inventory gain arises when a company buys raw material (crude oil in case of IOC) at a particular price, but by the time it is shipped to India and processed into the final product (fuel), international prices would have moved up. Since fuel prices are benchmarked at prevailing international rates, an inventory gain is booked. Inventory loss happens if the reverse occurs.
IOC had a forex loss of ₹182 crores as compared to ₹2,804 crores foreign exchange gain a year back, he said.
Revenue from operations dropped to ₹1.44 lakh crore in October-December 2019 from ₹1.60 lakh crore in the same period of the previous year.
This, Mr. Singh said, was due to lower oil prices.
The company’s consolidated net profit in October-December stood at ₹2,695.09 crore.
For the third quarter of 2019-20, IOC’s product sales volumes, including exports, stood at 23.409 million tonnes. The refining throughput was 17.496 million tonnes and the throughput of its countrywide pipeline network was 20.962 million tonnes during the same period.
In the first nine months of current fiscal, IOC earned a net profit of ₹6,499 crores on revenue of ₹4.27 lakh crore as compared with ₹10,795 crore net profit in April-December 2018 on revenue of ₹4.61 lakh crore.
“IOC sold 67.490 million tonnes of products, including exports, during the first nine months of the financial year 2019-20. Our refining throughput for the first nine months of FY 19-20 was 52.316 million tonnes and the throughput of the Corporation’s countrywide pipeline network was 64.562 million tonnes during the year. The gross refining margin (GRM) during the first nine months of FY 19-20 was $3.34 per barrel as compared to $5.83 per barrel in the corresponding period of the previous financial year,” he said.